Posted by: Catherine Holahan on May 22, 2008

The US travel industry is facing a terrible year, thanks to credit crunched consumers and a weak US dollar. But Google sees an online opportunity in the struggling industry.

The search giant plans to expand its travel offering, which currently seems to be confined to one-off videos and ads from tourism boards. In the future, the site will have marketer-sponsored pages where would-be vacationers can learn tons about a destination and see related user-generated content. Check out this link to a YouTube New Zealand channel for an idea of the kinds of videos destined for such pages.

I journeyed to the NYC Googleplex May 21 to learn more about Google’s plans. There, I spoke with Rob Torres, Google’s managing director for Travel, over a lunch of beet salad and raspberry-garnished crepes. (I’ll save discussion of Google’s omnipresent cafeterias for another post).

Torres says that the goal of Google’s travel division—aside from tapping into the $90+ billion global travel ad and sales market—is to give users a destination where they can research travel plans, read user reviews, and see user uploaded videos and photos. Already, about 50% of travelers use some sort of online social media site to research their plans, says Torres. Why not give them a one-stop shop for travel information? “We are already so highly searched for travel,” says Torres.

Fueling Google’s travel plans is consumers move to researching and booking vacations online. In 2007, more travel sales were booked online than in person, says Torres. That means travel marketers, many of whom already spend millions on search ads and the like, will likely shift more of their budgets to the Web.

Also spurring Google’s interest is some early success with sponsored travel offerings. Nearly 900,000 people have watched a New Zealand tourism board’s video ad since it was uploaded to YouTube last September. That kind of traffic is bound to draw marketers.

Travel pages, or a full-fledged travel channel, also promise to help Google make more money from YouTube. Rather than try to convince travel marketers to advertise on user-generated videos, they can sell sponsored destination pages on YouTube where travel marketers can post their own videos and influence or control what types of content users upload. Then Google can also sell other forms of advertising, such as search ads, to drive traffic to the site.

All that advertising may seem like it would turn users off. But I agree with Torres that travel is one of those funny areas where the ads really are more like content. When I’m looking for a plane fare or a hotel, I typically don’t mind seeing an ad for a hotel or discounted plane fare. Just like when I’m reading Vogue, I don’t mind seeing clothing ads. I do mind, however, seeing ads for dating services or t-shirts when I’m on MySpace or Facebook or on any other site on the Web. Go fig.

Torres was quiet as to when Google’s expanded travel offerings would roll out. And he wouldn’t confirm that Google was planning a full-on travel site, and not just sponsored pages or a channel on YouTube. But with nearly a billion in marketing dollars on the table, I wouldn’t put it past Google to go after it aggressively.

It’s worth noting one thing that any future Google offering won’t have—airline fares or hotel bookings. Even Google is unwilling to try its hand at the part of the beleaguered industry’s business. The customer service investment is huge, explains Torres. Moreover, travel sites and airlines are some of Google’s largest advertisers.

Reader Comments

Bob Mc Millen

May 23, 2008 1:23 PM

luigi

May 27, 2008 7:16 AM

I liked this article but...don't you think that Google simply shouldn't be allowed by law to enter directly in such businesses. It is unfair competition and Google is doing this already in some areas.
The question is: are journalists aware of this issue? Is there any talk on regulate this? I see that there is so much attention on Microsoft(evil capitalist) but none on Google (friendly computer geeks).
regards,
Luigi

Juha Huttunen

May 27, 2008 7:26 AM

Thanks for the good article! Google's interest in the travel vertical is again more proof for the fact that vertical search is coming. The current form of search can't effectively solve vertical specific problems.

We already have dozens of travel related social networks and meta search engines for cheap flights and hotels as well as tons of hotel reviews. That means that there's no shortage of information, quite the contrary. The problem in the future is more about how to find reliable information suited to your preferences and interests.

We at TripSay are trying to develop a solution for that as are many others I'm sure. Google's interest in this space makes it only more interesting for everyone.

Eduardo Rohen

May 27, 2008 9:42 AM

Hello. When you say "with nearly a billion in marketing dollars on the table", would you mind indicating the source of that figure? Thanks

Steve Behrisch / OnRes Systems

May 27, 2008 12:29 PM

Great article! I'd been keen to know where Rob's source for "In 2007, more travel sales were booked online than in person". It's believable as my customers are reporting continued growth in their online bookings through AccomPro. Check out:

www.onressystems.com

Alex Bernstein

May 27, 2008 12:53 PM

Very interesting article Catherine but the closest I have found to "a one-stop shop for travel information" is by Travelindex Network at www.travelindex.com, a huge travel directory combined with destination information at www.bestdestination.com (many sites still under development but the ones live have amazing content in quality and content (eg. www.tourismsrilanka.net or www.gothailand.org).

0null

May 27, 2008 1:07 PM

google's new plan, again? After the Android..

Kenneth Dreyer

May 28, 2008 11:35 AM

I don't really like the fact that Google is trying to expand into everything. I mean, it's pretty unfear for the thousands of travel sites out there trying to make living, considering that Google will just alter their search to show their stuff before the organic search. In Norway their currently doing it with some crappy maps, thats pretty annoying.

I think someone should step in and stop them from taking over the whole monopoly. I mean, Microsoft can't go to the toilet without a court approving it, but Google can map the entire freaking world and no one even cares - isnt that a bit odd?

tony perez

May 29, 2008 6:51 AM

Another fluff piece, google will rule evertyhing, etc. etc.

jeff

May 29, 2008 8:30 AM

ginger bee

May 29, 2008 9:12 AM

I think the data point of "more sales booked sales" needs to be substantiated and qualified. Is it # of transactions? As far as I'm the big OTAs can have the hotel and air which makes people ciruclate data points like these...margins being what they are travel buyers still prefer to tald to a travel pro for a larger ticket (and higher yield) purchase. let's not get all silly because this is Google...the travel business is quite dynamic and it'll take expertise beyond social networking know-how.

Tarah Goldklang

May 29, 2008 1:26 PM

Why is it that nearly everyone is repping their travel site in these comments? Good grief.
Anyway, realistically, we know that Yahoo is a portal and a search engine, and monetizes their travel pages/ destination guides/ travel paid inclusion. Why WOULDN'T Google try to cash in on that? Seems to make good business sense if they can do it right.

steve chen

May 29, 2008 3:17 PM

No relation to youtube founder steve chen (he's got a little more dough than I :)

The online travel industry has thousands of companies in the space, but only a few that are recognizable by the general public. Google obviously has a huge resource advantage over most others, but a lot of the "little guys" offer very compelling products as well.

This seems to be part of the next wave of online travel planning - tools & features that help you do more than just book and/or review things. The offering that we're developing here at GoPlanit.com aims to make your trip planning easier and less aggravating. Hopefully we'll help lead that wave!

Jonathan

May 30, 2008 6:11 AM

looks like a lot of travel agencies are worried... shouldnt you be focusing on how to improve your service rather than asking government to ban them from entering your industry? Protectionism at its best again...

Teddie

June 3, 2008 12:01 PM

This has been on the cards for years. What most people overlook as well is the massive volume of travel related services ALREADY offered by Google.

Donald Bailey

June 6, 2008 11:34 AM

Real leaders (visionaries) don't worry about the present situation, they provide just-in time portals for RIO with the understanding of a relaxing future paths. "Google creates we respond".

Rob Torres sees that the travel industry lacks innovation, creativity and consumer solutions for travelers and this in it self can add up to billions in revenue of them. Yes, addressing travelers behavioral requirements makes sense by giving them "a destination where they can research travel plans, read user reviews, and see user uploaded videos and photos" like Torres stated but, in my view Troogle or any of the other web sites commented on this blog stops short of any real vertical breakthroughs in the tourism industry.

Alex Cybriwsky

June 7, 2008 6:43 PM

My site already combines Google maps with destination guides and Google Video. I bet a Google Travel would have even more, including a booking metasearch engine and hopefully meaningful reviews.

Mary Welch

August 7, 2008 1:35 AM

I believe that Google is not truly ready for travel. Especially not a true travel booking engine. Travel is a 7-trillion dollar industry, world wide, and it maybe more than Google can handle.
Try www.FirstFridaysTravel.com
if booking travel is truly what you want!

Douglas Quinby

August 21, 2008 8:32 AM

The source of Rob Torres' statement that 50% of travel is now booked online, is from PhoCusWright.

jim

September 8, 2008 6:40 AM

Wow! This would be of great help to us travelers. Does Google also plans to have a discounts for their opening?

ABTT

October 20, 2008 9:15 AM

If you wanna go to any country, you can ask us about it.
Agancy of buissnes travel and tourism!
abtt.com.ua

daniel

April 10, 2009 8:18 PM

what is happening with gtravel, something new?
www.hotelesenibiza.tel
www.hotelesibiza.tel

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.